It's working fine here. Was it working before and then stopped? What RADIUS server are you using? Anything in the RADIUS server log?
The error you show is not what would normally be seen for a bad password, but looks more like EAP itself is failing between strongSwan and your RADIUS server.
Here's a couple quick examples from my logs:
Bad password:
Feb 25 08:06:12 charon 05[IKE] <con2|2>received EAP identity 'jimp'
Feb 25 08:06:12 charon 05[CFG] <con2|2>RADIUS server 'radauth' is candidate: 210
Feb 25 08:06:12 charon 05[CFG] <con2|2>sending RADIUS Access-Request to server 'radauth'
Feb 25 08:06:12 charon 05[CFG] <con2|2>received RADIUS Access-Challenge from server 'radauth'
Feb 25 08:06:12 charon 05[IKE] <con2|2>initiating EAP_MSCHAPV2 method (id 0x01)
Feb 25 08:06:12 charon 10[CFG] <con2|2>sending RADIUS Access-Request to server 'radauth'
Feb 25 08:06:13 charon 10[CFG] <con2|2>received RADIUS Access-Reject from server 'radauth'
Feb 25 08:06:13 charon 10[IKE] <con2|2>RADIUS authentication of 'jimp' failed
Feb 25 08:06:13 charon 10[IKE] <con2|2>EAP method EAP_MSCHAPV2 failed for peer 10.6.0.101</con2|2></con2|2></con2|2></con2|2></con2|2></con2|2></con2|2></con2|2></con2|2>
Good password:
Feb 25 08:06:32 charon 16[IKE] <con2|3>received EAP identity 'jimp'
Feb 25 08:06:32 charon 16[CFG] <con2|3>RADIUS server 'radauth' is candidate: 210
Feb 25 08:06:32 charon 16[CFG] <con2|3>sending RADIUS Access-Request to server 'radauth'
Feb 25 08:06:32 charon 16[CFG] <con2|3>received RADIUS Access-Challenge from server 'radauth'
Feb 25 08:06:32 charon 16[IKE] <con2|3>initiating EAP_MSCHAPV2 method (id 0x01)
Feb 25 08:06:32 charon 10[CFG] <con2|3>sending RADIUS Access-Request to server 'radauth'
Feb 25 08:06:32 charon 10[CFG] <con2|3>received RADIUS Access-Challenge from server 'radauth'
Feb 25 08:06:32 charon 16[CFG] <con2|3>sending RADIUS Access-Request to server 'radauth'
Feb 25 08:06:32 charon 16[CFG] <con2|3>received RADIUS Access-Accept from server 'radauth'
Feb 25 08:06:32 charon 16[IKE] <con2|3>RADIUS authentication of 'jimp' successful
Feb 25 08:06:32 charon 16[IKE] <con2|3>EAP method EAP_MSCHAPV2 succeeded, MSK established
Feb 25 08:06:32 charon 06[IKE] <con2|3>authentication of '10.6.0.101' with EAP successful
Feb 25 08:06:32 charon 06[IKE] <con2|3>authentication of 'shona.dw.example.com' (myself) with EAP
Feb 25 08:06:32 charon 06[IKE] <con2|3>IKE_SA con2[3] established between 198.51.100.7[shona.dw.example.com]...198.51.100.6[10.6.0.101]</con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3></con2|3>
In my IPsec log settings (VPN > IPsec, Settings tab) I have "IKE SA" and "IKE Child SA" set to Control and "Configuration Backend" set to Diag, which is why it's a bit chatty there.